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A third of Canadians living paycheque to paycheque: survey

Wed., May 22, 2013

Ontarians report that they value their wealth more than the average Canadian, but more than a third of households in the province say they’re left strapped for cash after paying essential bills each month, says a new survey.

In a Canada-wide survey conducted for the Certified General Accountants Association of Canada, a quarter of households across the country say they never, or rarely, set aside any savings over the past year.

It also says 29 per cent of households from coast to coast are stuck tread-milling between paycheques. An analysis of the survey, co-authored by Rock Lefebvre, says those households are either breaking even, or sliding into debt.

“They felt that their incomes were not keeping pace with the cost of living,” Lefebvre told the Canadian Press.

Regionally, roughly 34 per cent of Ontario respondents said they had either no money or nearly no money after paying their bills, compared to 26 per cent of remaining Canadians.

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“(Ontarians) struggle more in actually accumulating wealth and being satisfied with the results of that accumulation,” Elena Simonova, also a co-author of the analysis which examined the responses of more than 1,800 people, told The Star.

Two-thirds of national households had no expectations that their situations would get better, and reported they would continue to have no wealth accumulation.

The authors pointed towards consumer consumption as one of the things hampering the accumulation of wealth, which the analysis defined as a household’s total assets minus debt.

“This consumption pattern that has emerged over the last decade . . . is playing havoc with people’s ability to save,” Lefebvre said. “Because of the low interest rates coupled with the behaviour of borrowing, people are possibly buying homes and cars that are a little more expensive than what they would typically be able to afford.”

Canada’s household savings rate plummeted to 3.8 per cent savings of disposable income at the end of 2012 from its peak of about 20 per cent in the early 1980s, the analysis said.

The wealth of an average Canadian adult was only $6,600 in 2012, or 2.7 per cent higher when compared to the wealth controlled by households at the beginning of 2008.

Jennifer Bragg, a former researcher on the personal finance reality TV series, “Til Debt do us Part,” said the results are hardly surprising.

“It’s such a depressing statistic, it’s kind of scary,” Bragg said.

“It’s death by small costs.”

“I do know a lot of friends like that,” added Bragg. “They spend everything they have and then they run into emergency situations and they don’t really have anything left over.”

The authors of the analysis also said Canadians aren’t taking advantage of the times to save.

“This is a beautiful time to get ahead with these low interest rates. (But) people just seem to be living the life rather than make the sacrifice to get rid of this debt while it’s low interest and come out of it on the bright side,” Lefebvre said.

Jimohal Francis said he tries to save, but the cost of living adds up, even though the Torontonian is splitting rent and utilities with his aunt.

“Sometimes I find it very hard to save,” said Francis, 24, who works retail part-time. “It’s still hard to pay the bills and to get by.”

The online survey was conducted last Sept. 14-21 by Ipsos Reid with 1,805 Canadians aged 25 and older.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

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